What Does Gap Car Insurance Cover?

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Getting a new car is great and making sure you have the insurance coverages you need for it is one of the most important things you can do to protect your new vehicle. Of course, you don't want to have a gap in insurance so that is why you need to have gap car insurance. Yes, you know having gap insurance coverage is important, but it is just as important to know what those coverages mean.

You Won't Have a Gap in Insurance, but What Will Gap Car Insurance Cover?

Understanding your gap car insurance coverages is simple and can save you a lot of money and time later.

There are two important things to know about your gap insurance coverage: what is covered and what is excluded (or not covered). First, let's take a look at common gap car insurance coverages:

Gap Car Insurance Covers Total Losses Due to:


As you can see, pretty much any totaled loss your regular car comprehensive and collision insurance will cover, gap insurance will also cover. Most gap car insurance policies will also cover your insurance deductible.

Gap Car Insurance Covers Most Total Losses, But What Does it Exclude?

So, now that you know your gap car insurance will pretty much cover most any total loss that your regular car insurance company did not cover, what will gap insurance not cover? 

6 Common Gap Car Insurance Exclusions:

1. Cars that Are Not Covered by Both Comprehensive and Collision Insurance

2. Any Equipment On the Car that Was Not Factory Installed

3. Money that Was "Rolled" Into the Car Loan Such as From a Trade-in or Leased Vehicle

4. Costs for Any Other Products Added to The Loan or Lease Such as Extended Warranties

5. Unpaid or Overdue Lease or Loan Payments

6. Financial Penalties or Security Deposits on Leased Vehicles

Please remember that these are only examples of common coverages and exclusions and it is important to check your own policy to see what your particular gap car insurance coverages and exclusions are.